the side volume button on my iPad 2 is not working. Whether I press it up or down, it just shows the little "sound effects" icon without controlling any of my sound. When I try to play music or movies on the iPad, the sound stays muted. But I know the speakers work, because when I test ringtones, it plays it.

The side switch is switched upwards, and the 'change with buttons' option under sound settings is on.

Do you have an activator action set for the volume keys maybe? You can change what volume up and down does in the Activator settings, go to the volume button up and make sure it's on original action and do the same for volume down.

I do have exactly the same problem with my iPad 2 & iOS 5.1.1 on it... Volume control buttons do not function and say "sound effects" when pushed. I can get the sound back only when I plug the charger in and out, before it goes mute again after a while. How did you guys manage to solve it at the end?

Any luck yet? I just got a new iPad and I think this is rediculous. It seems to me like the iPad thinks that it should be sending audio out through the connector as if you were playing audio through a 30 pin interface; Because when I plug it in to my car it and then unplug it BOOM it works for a little while. I think that this would be an easy fix if any developers would like to team up, find the bug and release a tweak to repair please PM me.

If I understand your problem correctly, what's happening is the volume button is controlling the device volume and the alerts and ringers volume. When the volume control says, "Sound Effects," its referring to alerts and ringers. When not using an app, or using an app that doesn't require sound, the volume button controls only the alerts and ringers. When using an app that requires sound, the volume button controls the device sound. To change this, do the following:

1.) Go here: Settings>General>Sounds

2.) Slide the "Change with Buttons" option to OFF.

Now, the volume button controls only the device volume. To change the volume of ringers and alerts, you use the slider directly above the "Change with Buttons" switch.

If that doesn't help you, then I have no idea what's going on with your device, sorry. Good luck!

From other forums, I gathered that it is usually a hardware problem, specifically the dock connector.
Some folks found minute metallic debris in the connection port, and that cleaning the port solved the problem.
For me, simply replacing the charging cable solved the problem immediately. (Note: after connecting my damaged (?) cable, the volume controls would be normal for a few seconds, but then fade out. That could be a hint as to the cause??)